In the current climate, it can pay to have a niche skill-set and it’s certainly important to work in an area where strong growth is still expected. One such area is the insurance solutions divisions of both investment banks and asset managers.
Insurance and reinsurance firms are, of course, subject to a variety of risks, and it’s the job of the insurance solutions teams of banks and asset managers to provide ways to hedge against this. Banks are recruiting for both sales and structuring roles in these divisions, to advise insurance firms on creating structured products such as catastrophe bonds and reinsurance sidecars.
Last week, boutique investment bank StormHarbour revealed that it has hired Christian Dinesen from Bank of America/Merrill Lynch as head of insurance solutions. He said that insurers “stand in front of truly historical and transformational challenges and opportunities, driven by changes in regulation and capital markets dynamics.”
BlackRock is hiring
BlackRock is also hiring for its insurance team, as is Aon Benfield, the specialist investment banking arm of insurance consultant Aon.
Its CEO, Paul Schultz, tells us that there’s huge potential for growth in this area, particularly for investment banks working on risk transfer capacity products: “There’s significant growth in new capital being attracted to this space and this is creating opportunities for job creation both within the investment banks and investors.”
So, what does it take to secure a position in this area? Schultz says that they’re not just looking for “banking types” and that the analytical skill-sets required for the role can often be found in other areas of insurance. It’s not uncommon for banks to hire actuaries, people with catastrophe modeling backgrounds or even accountants or lawyers with a deep understanding of regulatory issues, he says.
You need client skills
One thing everyone with aspirations to work in this area needs is client skills – Schultz points to the “entrepreneurial” environment and the importance of communication skills. In other words, you’ll need to be able to effectively pitch your company’s services to clients.
He adds that people are often transferred internally – Aon employs over 60,000 people globally, after all – and this is a relatively common tactic within other investment banks, suggests Matt Bullock, associate director and insurance sector specialist at recruiters Goodman Masson.
Clients are demanding
“Clients are being very demanding with whom they take on for their pensions and insurance solutions teams,” he says. “After months of interviewing potential candidates, one investment banking client decided that the quality of people wasn’t strong enough and transferred internally. This happens fairly often.”
A caveat to all this is that these teams are still relatively small – around 10 people in a large investment bank – and the pay is no better than other areas of investment banking. Bullock says that associates can expect around $116,000 and VPs $124,000 to $186,000.